During President Biden’s tenure in the Oval Office, his administration made it a point to boost investment in domestic manufacturing. One of the administration’s accomplishments came in 2022, when Biden signed the CHIPS and Science Act — a law that seeks to invest $280 billion into research and development and semiconductor manufacturing here in the U.S.
Over the last couple of years, Intel emerged as one of the biggest beneficiaries of CHIPS Act funding. Given rising investment in artificial intelligence (AI) infrastructure — particularly in data centers and chipware — I previously predicted that Intel could be a big-time winner under the new Trump administration — which, like his predecessor, is focused on enhancing domestic manufacturing investments.
However, a recent announcement from Taiwan Semiconductor Manufacturing (NYSE: TSM) is making me reconsider my cautious optimism around Intel.
Let’s explore Intel’s latest fumble and assess why Taiwan Semi’s latest announcement could be the ultimate checkmate move against its American foundry rival.
Last year, Intel generated $53.1 billion in total revenue. While this represented only a 2% decline year over year, results from the company’s foundry business were more alarming.
In 2024, Intel Foundry generated $17.5 billion in sales — down 7% year over year. The foundry business competes directly with Taiwan Semi, which owns nearly 60% of the global foundry market. Given that Intel Foundry is decelerating at a faster rate compared to the company’s overall business, I’m not too confident Intel is proving that it can catch up to its long-established rivals.
To add salt to the wound, Intel just announced that it is now delaying opening a new plant in Ohio until 2030. For reference, the plant was supposed to be operational between this year and 2026. Now, it’s pushed off until next decade.
On March 4, Taiwan Semi announced that it is investing $100 billion into the U.S. to build three additional fabrication plants, two packaging factories, and a research and development (R&D) center. This investment comes on the heels of an existing $65 billion project in Arizona, where TSMC is building additional manufacturing capabilities.
TSMC’s investment in the U.S. is meant to help the company strengthen operational relationships with major customers including Nvidia, AMD, Broadcom, and Qualcomm.
Over the last several weeks, several tech giants in the Magnificent Seven group have made public their respective plans to invest in AI infrastructure over the next several years. On the surface, you might think that Intel could benefit from rising capital expenditures (capex) from AI’s biggest contributors. Instead, TSMC has taken note of Intel’s struggles, and I see the company’s new $100 billion investment in the U.S. as a move that could further strengthen its already-dominant pulse on the foundry market.
